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Trading Financial Impact Of Day Term Paper

After losing everything while day trading, one unstable man "shot and killed nine people in Atlanta in a two-day spree. Just two weeks after the shooting, the North American Securities Administrators Association released a report stating that seven out of ten" of all day traders lost everything." But what about the overall effect markets? Some analysts concede that while day traders added volatility, a small dose of volatility in a sluggish market environment can prove a positive ingredient. Volatility might be difficult to stomach, but "volatility is the lifeblood of the markets. If prices don't change, trades don't happen. If trades don't happen, stocks are superfluous. Without stocks, new business would not get funded, new fortunes would not be made, and new technologies would not get invented." (Johnson, "Trillion Dollar Bet," 2000)

The technology that enabled day trading was pervasive throughout the market, even in its more traditional sectors, so it is not fair to simply blame these outsiders and renegades, either. Even as early as the 1980's, there was concern that the better the technology, the quicker traditional and nontraditional investors could move, and the more volatile the markets. "We are learning that when we compress the time in which things happen, they happen differently," said Robert a. Brusca, the chief economist at Nikko Securities. "The reaction time to market-influencing events has dropped from months or days to minutes and seconds," added Allen Sinai, the chief economist of Sherson Lehman Brothers. (Finance/Program Trading, 2004)

Although day trading has fallen out of favor as a cultural phenomenon, it is by no means dead. On January 22, 2004 - GAIN Capital Group, a provider of foreign exchange trading and...

"The site seeks to support the growing number of new entrants to the Foreign Exchange (Forex) market, including self-directed traders from other financial markets who are in need of increased education and support services. Over the past several years, the Forex market has gone from being virtually unknown to most retail investors into one that now attracts individual investors worldwide, and of varied experience levels," noted the founder of the portal. He cited such offerings as "Forex mini accounts" that allows "traders to open an account with as little as $250 and control up to 200x leverage." (GAIN, 2004) the NASDAQ headiness may have come to an end, but the fervor to make money that spawned volatility but not long, term and productive investment in the markets thus still exists -- and lives on.
Work Cited

Finance / Program Trading. (2004) Excerpt from the New York Times, Dec. 15, 1987. Also excerpted from the Association for Computing Machinery (ACM) Risks Forum, Forum on Risks to the Public in Computers and Related Systems. Retrieved 3 Dec 2004. http://mt.sopris.net/mpc/finance/program.trading.html

Forex. (January 19, 2004) Forum, Forum on Risks to the Public in Computers and Related Systems. Retrieved www.forex.com

Stock trading: The ultimate handbook. (2004) Daytrader.com. Retrieved 3 Dec 2004. http://day-trader-coach.com/

Johnson, Cory. (2000) "Trillion Dollar Bet." NOVA. PBS. Retrieved 3 Dec 2004. http://www.pbs.org/wgbh/nova/stockmarket/online2.html

Johnson, Cory. (2000) "Impact of Day trading." NOVA. PBS. Retrieved 3 Dec 2004. http://www.pbs.org/wgbh/nova/stockmarket/online1.html

Sources used in this document:
Work Cited

Finance / Program Trading. (2004) Excerpt from the New York Times, Dec. 15, 1987. Also excerpted from the Association for Computing Machinery (ACM) Risks Forum, Forum on Risks to the Public in Computers and Related Systems. Retrieved 3 Dec 2004. http://mt.sopris.net/mpc/finance/program.trading.html

Forex. (January 19, 2004) Forum, Forum on Risks to the Public in Computers and Related Systems. Retrieved www.forex.com

Stock trading: The ultimate handbook. (2004) Daytrader.com. Retrieved 3 Dec 2004. http://day-trader-coach.com/

Johnson, Cory. (2000) "Trillion Dollar Bet." NOVA. PBS. Retrieved 3 Dec 2004. http://www.pbs.org/wgbh/nova/stockmarket/online2.html
Johnson, Cory. (2000) "Impact of Day trading." NOVA. PBS. Retrieved 3 Dec 2004. http://www.pbs.org/wgbh/nova/stockmarket/online1.html
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